Global chip sales rise to $12.5 billion in June 2003

AUGUST 4--Worldwide sales of semiconductors reached $12.54 billion in June, up slightly from the $12.49 billion in revenue reported in May 2003, the Semiconductor Industry Association (SIA; San Jose, CA; www.sia-online.org) reports. For Q2-03, chip sales of $37.6 billion were up 3.2% from $36.4 billion in the year's first quarter, and up 10.4% from the $34.1 billion recorded in the Q2-02.

"In June, we forecast 3.2% growth for the second quarter and steadily increasing growth throughout the year, and that is exactly what we are seeing," states SIA president George Scalise. "As predicted, the recovery is broad-based, and now is beginning to draw strength from computation, the largest end market for semiconductors, as well as the global consumer and communications sectors."

During the quarter ending in June, sales of computers rose almost 8% on a unit basis year-over-year, the strongest growth since 2002, supporting an 8.2% growth in microprocessors. In the wireline sector, strong consumer demand for broadband services such as DSL and cable products contributed to a 15.7% year-over-year increase in standard cells and a 27.1% increase in programmable logic devices. In the consumer space, brisk sales of DVD's and digital cameras produced an increase of 33.9% in optoelectronics, while flash memory used in these products and mobile phones was up 37.1% year-over-year.

Capacity utilization on the leading edge has reached 96%. Excess inventory in the supply chain is now at negligible levels with few exceptions. "Now that inventory has been worked off, increasing demand as the year progresses will directly generate rising semiconductor sales," Scalise states.

For the June quarter, sales in Japan rose 5.3% on a quarter-over-quarter basis, Asia Pacific was up 5.9%, and Americas was up 3.6%, while sales in Europe declined by 4.1% due to sluggish economic growth in Europe and outsourcing of production to Asia.

The 2003--2006 midyear forecast released by the SIA in June projects a compound annual growth rate of 9.8% over the forecast period. Annually, worldwide semiconductor sales are forecast to increase 10.1% in 2003, 16.8% in 2004, 5.8% in 2005, and 7.0% in 2006, to reach $205 billion.